Reports show little improvement in national market

Conditions in the national commercial real estate industry still have yet to see any significant improvement in 2010 according to a couple of recent reports. When it comes to commercial lending, Fitch Ratings reported that delinquencies of U.S. commercial real-estate loans in collateralized debt obligations, or CDO, hit 12.8 percent in March, which was up from 12.5 percent in February. Additionally, Fitch said that realized losses increased almost three-fold in March and are expected to continue to rise at an accelerated rate over the next several months.

In addition to Fitch Ratings’ report, the Federal Reserve Beige Book that was published last week also was the bearer of bad news. The book stated that while the U.S. economy continues to show signs of recovery, commercial real estate was characterized as “slow across the nation.” The only two major markets that were an uptick in activity were Richmond, Virginia and Dallas, Texas. The Fed noted that the Dallas market may finally be nearing the bottom of the downturn.

The improvement in the Dallas market is good news for Oklahoma City considering that there is a growing amount of synergy between to the two markets thanks to their close proximity. Of course, it’s important to note that the Oklahoma City market did not fall as far the Dallas market.

The Fed also noted in the Beige Book that contacts in Philadelphia, Richmond, Kansas City, and Dallas expressed concern that lease concessions from landlords were putting downward pressure on rents.